Vocational Education Research at IES

24 Nov 2015

Stefan Speckesser, Chief Economist

Technical and professional skills and prosperity

In the summer of 2015, a plan for ‘Creating a more prosperous nation’1 was presented to Parliament, outlining major policy initiatives for both the Department for Business, Innovation and Skills (BIS) and HM Treasury to help reduce the productivity gap between the UK and other G7 countries. According to this document, in Germany, France and the USA, GDP per hour worked is about 30 per cent higher than in the UK. One of the key policy areas identified was to improve vocational education and training (VET), with the ambition of a ‘reversal in the trend of employer underinvestment in training, which has seen a rapid decline in the amount and quality of training undertaken by employees over the last 20 years’. It also described concrete policy reforms to strengthen employer engagement in VET and thus improve workplace productivity.

Looking at the international evidence, for example as summarised by the OECD2, the Government’s focus on more and better quality technical and professional education for today’s and future generations of young people, for example through high quality apprenticeships, as a source of future prosperity seems well justified.

A multi-year research programme on the impact of VET

The high-level policy change towards enhanced professional skills creates a number of research questions on the impact of VET and how the existing education system can be improved. The most important are:

How does VET affect individual prosperity, firm productivity and profitability, and economic growth?

How can the quantity of ‘high quality’ VET provision be improved?

How do the costs and benefits of VET influence individuals’ participation decisions?

In order to answer these fundamental questions, the Department for Business, Innovation and Skills funded the new Centre for Vocational Education Research (CVER), a multi-year research programme. The Centre aims to become a world-class research hub with the potential to generate a step-change in our understanding of the nature, significance and potential contribution of VET to individuals and the wider economy.

Dr Stefan Speckesser (IES Chief Economist) leads IES’s engagement in CVER, a partnership with other leading academics on the empirical economics of education from the Centre for Economic Performance at the London School of Economics and Political Science (Professor Sandra McNally, who is also CVER’s Director), the University of Sheffield (Dr Steven McIntosh) and London Economics (Dr Gavan Conlon).

Towards better, more robust evidence

Previous research has uncovered evidence on the high earnings and employment returns associated with some forms of VET, creating strong incentives for individuals and employers to invest3. One of the main objectives of CVER’s research is to provide a better, more complete picture of the impact of the full range of specific VET options, so that individual decisions to engage in particular learning can be better informed by expected benefits.

In order to quantify a broader range of impacts, the Centre has started to exploit an unrivalled database of administrative records on individual education participation, both from the National Pupil Database (NPD) and the Individualised Learner Records (ILR) linked to subsequent earnings and employment data (from Her Majesty’s Revenue and Customs) at individual level. This empirical approach will yield robust estimates of the impacts of education investments considering the full diversity of young people’s previous education experiences, as well as local labour market and education options.

CVER’s work programme also aims to understand how high-quality VET can be provided, ie which institutional features and resources have to be in place to produce good professional and technical skills, and how careers advice and better information can help young people passing through initial vocational education to make successful transitions to the labour market.

Initial findings from CVER’s research are already being disseminated at conferences, via its website (http://cver.lse.ac.uk), and through meeting policy makers, VET education practitioners and young people. The Centre also actively engages with the research community at home and abroad by running a seminar series, conferences, discussion papers and academic journal outputs, publications for non-specialist audiences, the internet and social media.

Buscha, F and P. Urwin with D. Thomson, D. Bibby, T. Knight and S. Speckesser (2012), Estimating the labour market returns to qualifications gained in English Further Education using the Individualised learner Record (ILR), Department for Business, Innovation and Skills

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